Don't fear a credit card

As a small business owner, you are constantly on the look out for ways to save money and reduce paperwork so you are probably thinking a small business credit card would be the last thing you need - another bill, more paperwork and the chance of debt. In actual fact, it could help your business run more efficiently.

That's not to say that small business credit cards don't come with risks, after all it allows you to spend money you may not have. But it can be a useful alternative to cash if you stick to some guidelines for selecting, applying for and managing a business credit card. Do what you can to ensure the card works for your business rather than you working to pay it off each month.

Don't let the fear of having a business credit card stop you from utilising its benefits. Use these four tips to get the most from your card.


Before you start looking at banks and cards, you should determine what your business' credit cards needs are. This will ensure you know what you are looking for in a card and stop you signing up for extras that aren't necessary.

When selecting a business credit card, take some time to explore your options, comparing cards and providers. Always start with your current bank as some offer incentives and good deals (like a higher credit limit or lower interest rate) to existing clients with good histories. Even if your bank offers you a deal that you believe can't be beaten, it is still important to compare it with other credit card providers. It may be useful for you to visit one of the website that compares credit cards such as, or

When comparing cards, make sure you consider:

  • the interest rate
  • the period of interest free days
  • the credit limit
  • the extras or reward programs
  • is the card widely accepted?


You should be aware that every time you apply for a credit card, whether it is approved or not, it appears in your credit history. Therefore it is important you make your business an attractive applicant to give yourself the best chance of approval. Be organised. Before you approach a bank or financial institution, order a copy of your business credit report so you know what you are dealing with. This will allow you to sort out any discrepancies early and give you an idea of which way your application may go. Commercial credit reports are available from Dun & Bradstreet by visiting

If you are a new start up, ensure you already have an ABN, as the credit card provider will require this in order to issue a business credit card. Even though it is a card for business purposes, you will also need to identify yourself as the card holder so have your 100 points of identification ready. It is a great idea to have all the paperwork organised and prepared before starting the application as it will not only save time but present an organised image to the credit card provider.

Also keep in mind that the financial institution may ask you what credit limit you would like - carefully consider your needs rather that just selecting the highest limit. In this case, it may be helpful to ask the advice of your accountant or financial advisor.

Many small businesses use a personal credit card for business purposes however this approach impacts an individual's personal credit rating rather than their business rating. For this reason, it is advisable to keep all aspects of your personal and business finances separate.


To have your credit card working for your business, it is important to know how to use it effectively. One of the greatest benefits of having a business credit card is that it makes it easy to keep track of business related expenses- but this is only possible if you use the credit card to make all business purchases. While it may seem irresponsible to use the card over available funds, you need to remember that you will be using these funds at the end of each month to pay off the balance so you need to be disciplined and avoid spending money you don't have! Just as it is important to make all purchases on your credit card, it is also essential to keep your personal and business spending separate. In other words, don't start using the business card to buy personal items. If you do these two things correctly, your monthly statement can also serve as an itemised list of business expenses delivered to you each month - with no effort on your part.

Make sure you are aware of rewards programs linked to your card and any other extras so you can take advantage of what is available. Just be careful not to get into the habit of using your card just to get reward points!


Don't forget there are obligations involved in owning a credit card - namely, paying it off. In order to get the most from your card, aim to avoid accruing interest and getting hit with penalties and late fees. Therefore it is essential you keep up with your repayments and if possible, regularly pay off the balance in full.

The idea of a business credit card is to be able to easily record your business expenses, which means the funds you would normally use for these purchases should be free to pay off the card each month. If this is not possible, then you are spending beyond your capability and should consider dropping your credit limit or cancelling the credit card altogether. At the very minimum ensure you pay the minimum amount required before its due date, although be mindful that the remainder will be accrue interest until you pay it in full.

It is also important to monitor the use of your card regularly, between statements. Credit card fraud is not uncommon so make sure you frequently check for any discrepancies and speak to your bank promptly if you notice any issues. Regular monitoring, such as once a week, will also help you identify if you are overspending on the card and give you the opportunity to cut back.

In addition to these guidelines, the most important tip is to never forget it is a credit card and therefore not your own money. It is imperative that your credit card remains at the top of the list of your priorities as a business and doesn't get out of control.

Interested in finding out about some other credit options? Visit Types of credit available to small business >>

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